VAT calculations are simple once you know whether the price you have already includes VAT. The usual UK standard rate is 20%, but some goods and services are reduced-rated or zero-rated, so check the rate that applies before you start.

To add standard-rate VAT to a net price, multiply the price by 1.20. A net price of £100 becomes £120 including VAT. The VAT itself is the £20 difference.

Removing VAT is different. You should not simply take 20% off the total. If £120 already includes 20% VAT, divide it by 1.20 to get back to the £100 net figure. The VAT portion is then £20.

This matters when checking quotes, invoices and retail prices. Mixing up the two methods can leave you a few pounds out on a small bill and much further out on a larger one.

The VAT Calculator can handle both directions quickly. It is still worth writing down whether your starting figure is net or gross before you enter it.